This paper considers a general class of nonlinear rational-expectations models in which policymakers seek to maximize an objective function that may be household expected utility. We show how to derive a target criterion that is: (i) consistent with the model's structural equations, (ii) strong...

While many analyses of monetary policy consider only the adjustment of a central bank's target for a short-term nominal interest rate, other dimensions of policy have recently been of greater importance: changes in the supply of bank reserves beyond those required to achieve an interest-rate...

This chapter reviews the theory of optimal monetary stabilization policy in New Keynesian models, with particular emphasis on developments since the treatment of this topic in Woodford (2003). The primary emphasis of the chapter is on methods of analysis that are useful in this area, rather than...

We extend a standard New Keynesian model to incorporate heterogeneity in spending opportunities and two sources of (potentially time-varying) credit spreads, and to allow a role for the central bank's balance sheet in equilibrium determination. We use the model to investigate the implications of...

Using copulas to model the stochastic dependence of values, this paper establishes new general conditions on the profitability of product bundling. A multiproduct monopolist generally achieves higher profit from mixed bundling than from separate selling if consumer values for two products are...

Several theoretical contributions have argued that the returns to schooling within marriage play a crucial role for human capital investments. Our paper quantifies the evolution of these returns over the last decades. We consider a frictionless matching framework á la Becker-Shapley-Shubik, in...

This paper evaluates the impacts of unpaid maternity leave provisions of the 1993 Family and Medical Leave Act (FMLA) on children’s birth and infant health outcomes in the United States. My identification strategy uses variation in pre-FMLA maternity leave policies across states and variation...